Category Archive: Social networks
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Social Media: Don’t let the Bubble Burst
I am beginning to feel a little nervous about Social Media. I am beginning to get a little skeptical of all the Social Media initiatives around me.
But then I also read that a little anxiety and nervousness can be a good thing. A little increase in the heartbeat before you meet that someone special or before that important presentation is helpful. It just means that you care about what you are doing and want to be successful.
I read this on David Spinks‘ blog
There’s a problem, and deep down, we’re all aware of it…but to do something about it would make many feel hypocritical and so they push it aside whenever it’s brought up.
The Social Media Growth if allowed unchecked will be the next bubble to burst. There, I said it. The cat is out of the bag.
An important lesson from the dot-com bust (should be a lesson from common sense actually!!) was that companies that don’t make money cannot survive. Advertising, no matter how clever, cannot save you. Consider online pet-supply store Pets.com. Its talking sock puppet mascot became so popular that it appeared in a multimillion-dollar Super Bowl commercial and as a balloon in the Macy’s Thanksgiving Day Parade. But Pets.com was never able to give pet owners a compelling reason to buy supplies online. After they ordered kitty litter, a customer had to wait a few days to actually get it. And let’s face it, when you need kitty litter, you need kitty litter. The company lost money on most of the items it sold. Amazon.com-backed Pets.com raised $82.5 million in an IPO in February 2000 before collapsing nine months later.
Companies chased eyeballs, saying “don’t worry, revenues will follow”. People had business plans that had no mention of revenue. Web agencies popped up all over the place: building websites without a goal. You only needed “Web Programmer” or “Java” written on your resume to charge $200/hr for your services.
Fast forward to 2007. Similar story but same result. They said,
Buy the biggest house you can. Don’t worry about the downpayment. Don’t worry about the principal. Flip the house. Cash out. Live the “American Dream”.
We are still feeling the effects of the last one.
Fast forward again to the “Now” Network and we again see signs of the Social Bubble
- A search for “Social Media Consultant” on LinkedIn yields 46,069 results. “Social Media Expert” gives 12,426 results, “Social Media Evangelist” yields 1749 results and “Social Media Guru” gives 1477 results. For an industry that is 2-3 years old, that is a really large number. [Lesson: better to choose "guru" than "expert"
] - At most of the digital conferences, the theme is “social”.
- VC money being poured into social networks, microblogs, real time search engines and other cool SM startups that have no clear revenue models. “We will eventually get there”. There is so much free in the industry that advertising alone couldn’t possibly sustain it.
- Each company and their mother is jumping into Social Media, rushing to build a Facebook fan page or Twitter following. According to Bertrand Russell, “Collective fear stimulates herd instinct, and tends to produce ferocity towards those that are not regarded as members of the herd.” It is the fear of being “left out” or not being part of the herd that is driving a lot of companies into Social Media. The prime ingredient for a bubble is the desire to do something because everyone else is doing it.
Adam Sarner, an analyst with market research firm Gartner, projected that close to 40% of social networking initiatives at Fortune 1000 companies with Web sites will will be classified as failures.
I Love Social Media: Don’t get me wrong. I do believe Social Media has gone mainstream. I do believe that the SM tools when used in the right manner can increase both personal and business productivity, improve customer engagement levels, make innovation faster & cheaper and build new relationships.
2010 is supposedly the year when Social Media will be tested. Investors will start demanding some visibility into returns and cash flows.
To keep the Social Media Wave going, it is our responsibility as Social Media Leaders/Experts/Consultants/Evangelists/Gurus/Advocates (whatever fancy term you want to use) to ask the right questions:
- QUESTION 1: HOW IS IT GOING TO BENEFIT THY COMPANY?
- Engagement, loyalty, brand building are all good things. But they are all warm and fuzzy words that others in the firm may not understand. Start thinking and talking in a language that your CFO/CEO understands. Will customer engagement and brand loyalty result in increased sales or lower costs? List down all the potential benefits and see if/how they can translate into $$$. Any marketing initiative can only be sustained if it has the support of the folks who control the dollars.
And PLEASE, stop chasing followers. Don’t fall into the trap of “How to build 10,000 followers in 10 days”. Success in Social Media is not measured by the number of followers you have. This is not a competition on “My brand has more followers than your brand”. Social Media is for the long haul. It takes time to build the relationships and start seeing ROI. If it hurts to hear that, don’t do it.
- QUESTION 2: HOW IS IT GOING TO BENEFIT THY CUSTOMERS?
Social Media is not a channel for self promotion. It is frustrating to see so many corporate Facebook pages, blogs, Twitter feeds ONLY talk about the firm. They are in a broadcast mode. They are not engaged with the customer. They are not listening to the customer. They are not solving customer problems. They are not building loyalty.
You need to think how you can make the customer experience better or simplify their life or add more value.
Socialism is the New World Order – How Will Marketers Survive?
The New World Order is Socialism: I mean the digital world! Successful brands of tomorrow will be the ones that are comfortable letting go of so called “control” and work with the customers in creating the brand image.
According to Dunkin’ Donuts Brand Marketing Officer Frances Allen: “Customers will decide what our brand is about. And there is nothing we can do about it. And that is a very liberating thing. In the end, you can’t control it. And that’s the beauty of social media. And that means marketers have to let go – a little”
Listening to some of the panelists at the recently concluded OMMA Global, I realized that some of the brands get it. Companies like Ford, NY Times and Dunkin’ Donuts have leveraged the power of Social Media to build brand awareness, customer loyalty and increase sales.
Martin Nisenholtz, SVP Digital Operations at the New York Times Company says the Times loves Twitter. Twitter has become extremely important distribution feeder for the NY Times. Times has over 200 Twitter feeds and adding 15,000 followers a week. And talking about ROI, Twitter now drives 10% of NYT digital distribution, up from 0 a year ago.
From Facebook pages, to blogging and Twitter accounts, Ford has gone crazy for social networking. And there are no limits, according to Scott Monty (Twitter @ScottMonty), Global Digital & Multimedia Communications Manager at Ford Motor Company. Ford is presently in its eighth month of its Fiesta Movement social-media program to promote the eponymous car from Europe by letting 100 young social-media-savvy Americans drive the vehicles for several months. Each month, Ford has been assigning tasks to the “Agents” involving lots of driving and just as much blogging, Twittering, YouTubing and Flickring. “People are finding out about the Fiesta from people like them,” said Scott.
So what do companies and marketers do to adapt to a world where
- there are plenty more choices available to the consumer
- media is fragmented
- attention span has reduced dramatically
- audience is not listening anymore
What do they need to do different in order to survive and grow?
Marketers have to move away from the ‘broadcast” mode where they would just create information and then do a mass publish to the consumers. Marketers need to establish trust and authenticity. Marketers need to LIE in order to be successful.
L: LISTEN: Trust is built by understanding and acting upon the needs of the customer. To understand the needs, you need to listen in. Grow Bigger Ears. You need to make yourself accessible via Twitter, email, phone, whatever tool you use to answer a question, provide information. People trust people like themselves. Again, to cite @ScottMonty at Ford: “Your brand is not my friend. I don’t want a cup of coffee or car or piece of clothing to “friend” me on Facebook. I want the brand manager, designer or engineer. I want someone who can talk to me/listen to me.”
I: INFLUENCE: After Listening and Learning about the customer needs, you need to act on it in an authentic manner. Transparency and Authenticity are key in creating a degree of influence. Deborah Schultz, Partner Innovation Practice, Altimeter Group cautions: “Always be truthful on social media…Google is the long tail of lies.”
E: ENGAGE: If you constantly listen and learn from the customer AND influence her by acting in a transparent and authentic manner, you will enter the engagement phase with the customer. Engagement is where the customer becomes a brand ambassador/advocate. Customers in this phase are the most profitable. They provide you feedback and suggestions for improvement. They bring in other customers. They are willing to pay a higher price for your product compared to that being charged by the competition.
It will be interesting to see how companies adapt to the new Socialist order and how many are willing to partner with the customers to develop what the brand should stand for. What do you think will be some of the challenges?
ROII: the new mantra for measuring Social Media?
We discussed some engagement metrics in my previous post: level of exuberance or bonding or conversations with the customers. While engagement metrics are very important for measuring Social Media, NO marketing campaign can be sustained or successful without getting an adequate return on the dollar. We need to look at other quantitative metrics in addition to the ones we discussed earlier to measure the Return on “Investment”. To calculate return, we need to see:
- Increase in repeat business from existing more satisfied customers
- Revenue generated through new customer acquisition
- Revenue generated through customer referrals
- Decrease in support costs as problems get identified earlier
- Decrease in sales and marketing costs due to reduced customer turnover
But are quantitative and qualitative metrics alone sufficient to measure the success of your Social Media strategy?
I was at a social media event earlier today hosted by Acxiom and got introduced to a new definition of ROI: Return on Insight. Webster defines “insight” as the act or result of apprehending the inner nature of things or of seeing intuitively.
Metrics measure past events. We have all heard from financial advisors that past stock market behavior is no indicator for future performance. By focusing solely on metrics, you may miss out some customer conversation that will lead to the next big innovation for your company. You can gain valuable insights and feedback on product features and design (or service components) that will bring you closer to consumers and ultimately lead to a bigger market share.
So, I am proposing a new mantra for measuring Social Media: Return on Investments and Insights (ROII). And the first “I” should be Investments, to keep the focus on MONEY. But let us not lose sight of INSIGHTS.
What are your thoughts? I would love to hear what monetary and non-monetary metrics you currently use…
Size does matter: the secret sauce to building online communities
Why do we participate in online social communities? Well, to begin with, we are social animals and the social network provides us with a sense of affiliation, an opportunity to help and seek assistance; and finally boost our self esteem.
- limit the size of groups (300-500 people): more of a manageable size.
- encourage likability: organize groups around a purpose or interests or themes; get people to know and like each other.
- give them a reason: give users a reason to keep coming back. Fresh and meaningful content, free exchange of ideas, seeking and providing assistance.
Monetizing Social Networks- what will the privacy advocates say?
A lot has been written and said about monetizing social networks. Investors are worried that sites like Facebook that has over 250 million users worldwide and is a market leader, don’t have a clear business model.